Lesley Stones
30 August 2007
Johannesburg — MTN is not prepared to capitulate to a demand that it pay an extra $52m to keep its network operating in Benin, extending a stand-off that has seen its network silenced for six weeks.
Its network in the west African country was suspended on July 12 after it refused to accept new licence conditions imposed by the government and the regulatory authority. The government is trying to foist a new fee on MTN by claiming that because MTN took over an existing network it is not the original operator, and can therefore be subjected to new licence conditions.
Specifically, the government is trying to impose a backdated 500% hike in the licence fee from 5-billion CFA francs to 30-billion ($62m), and is demanding that MTN pays the difference of $52m before its network can be switched back on.
Yesterday, CEO Phuthuma Nhleko was unrepentant and unfazed, even though the wrangle could see MTN having to close or sell off its operation in Benin if a settlement is not reached.
"We believe the Benin authorities and regulator are acting completely outside the licence conditions that we signed on to, and we really don't believe that what they are asking for is appropriate," he said. Their demands were also outside the boundaries of both local and international laws, he said.
"We continue to engage them but we are not agreeable to what is being asked for. But we are hopeful that over the next two weeks some resolution will be found," Nhleko said.
Analyst Richard Hurst of BMI-TechKnowledge said the move by the Benin authorities looked dubious enough to suggest it may be legally flawed.
MTN had three options: staging a legal challenge; paying the higher fee; or negotiating some kind of settlement to remain active in the country.
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